Bharti Airtel 1Q net profit down 31%

NEW DELHI: Bharti Airtel's first-quarter net profit fell 31% from a year earlier, hurt primarily by higher interest costs and a forex loss. But the nation's top telecom company beat market estimates, helped by an improvement in voice business and cost controls, though revenue growth from data business continued to slow. The company posted a net profit of `1,462 crore for the three months through June, topping the average estimate of `1,159 crore in a Reuters' poll of analysts. The profit was higher also than the `1,320 crore it posted in the JanuaryMarch quarter.

Revenue was `25,546 crore and the telco ended the quarter with more than 357 million customers across India, South Asia and Africa. In India, it had nearly 256 million subscribers.

Net interest cost jumped 45% from a year earlier, largely due to higher outgo on loans related to spectrum, the company said in a news statement. It had exceptional gains of `353.6 crore in the past quarter, compared with exceptional losses of `2,138.4 crore a year earlier.

Consolidated net debt totaled $12.365 billion `82,845 crore) at the end of the quarter.(` “The year has begun well with revenue growth of 10.3% Y-o-Y and continued revenue market share gains,“ Gopal Vittal, the managing director for India & South Asia, said in the statement.

ET had estimated the company's data revenue growth to slow down, but voice business to show an improvement.

Bharti Airtel, almost a third owned by Singapore Telecommunications, has been offering 4G services at 3G rates to attract more data customers over the past few months. Data now accounts for almost a quarter of the carrier's India mobile revenue at 23.7%, higher than 23.3% in the previous quarter.

However, the percentage of customers using mobile broadband dropped to 23% in India from 23.2% in the previous three-month period, indicating that addition of new customers continues to be slow, said analysts. Mobile data revenue during the quarter grew 35.1% on year to `3,525 crore, slower than the 44.5% and 50.6% growth recorded in the previous two quarters. “Needless to say this was the slowest growth in data revenues and volumes in the past many years,“ brokerage firm Kotak said on the data performance. Mobile broadband subscriber addition during April-June was the lowest in many quarters, it added.

Bharti Airtel's India unit posted an on-quarter 7.7% rise in mobile data traffic and an increase of of 2.6% in average revenue per user (ARPU). It though registered a 2.5% fall in data realisation per MB, as increased competition led to a reduction in data rates. No. 2 telco Vodafone India, too, reported a fall in revenue due to competitive pressures expanding to the data business during the quarter.Analysts said this was on account of reduced data penetration at the lower and middle end of the market.

Voice rates in India, which had been on a downward trend across the industry thanks to intense competition, however, stabilised for Bharti Airtel in the past quarter. The company saw sequential growth of 2.2% in total minutes on the network. ARPU increased 0.5% sequentially, while average realisation from voice services per minute rose 0.7%. Analysts were upbeat about the company's focus on profit, but cautioned that this may be a one-off case.

Earnings margin before interest, tax, depreciation & amortisation expanded to 37.5% from 36.8% in the previous quarter, driven by better profitability in both India and Africa operations, helped by cost controls.

India mobile Ebitda margin improved to 42.4% from 40% sequentially, “mainly due to sustained top line growth and high focus on driving cost efficiencies“, the company said.

Bharti Africa's net loss narrowed to $78 million (Rs530.4 crore) from $154 million a year earlier mainly on the back of growth in the data customer base, besides stable currencies in most markets save Nigeria and Sierra Leone.

During the quarter, the Nigerian naira devalued by 42.1%, weighing on Africa revenue and leading to a net forex loss of `748 crore. Nigeria is Airtel's biggest market in Africa.

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Several people ET spoke with about Ericsson’s India operations, including its current and former employees, said the Stockholm-based firm has reduced headcount in the last one year or so across functions, in line with its global restructuring.

Several people ET spoke with about Ericsson’s India operations, including its current and former employees, said the Stockholm-based firm has reduced headcount in the last one year or so across functions, in line with its global restructuring.